JPMorgan Chase raises interest rates, adds $120 annual fee

JPMorgan Chase is the latest company drawing criticism for their untimely increase of interest rates and fees, actions that have provoked some customers to file a class-action lawsuit. 

Over 400,000 customers—less than one percent of Chase’s credit card accounts—will be affected by a new $120 annual fee and interest rate hike.  Chase, the nation’s largest card issuer with over 80 million accounts, has targeted customers with low promotional rates who have carried a large balance for more than two years. 

Readers of this blog informed me of Chase’s strategy as early as December of last year.  The news eventually percolated to the national spotlight with an article in USA Today.

Before the New Year, a reader of this blog also informed me of his success in negotiating lower rates and fees.  However, Chase recently has become more unwilling to negotiate terms, giving customers in this latest wave of extortion a Hobson’s choice: the choice between a higher interest rate and a higher minimum payment with the $120 annual fee.

This is yet another harbinger of doom for credit card customers, even more so in this case because Chase is one of the few major banks that reported a profit during the last quarter. 

Read more on this story in an article in USA Today. 

Comments

[Angela Durko]

My APR on Chase/Wamu JUMPED from 20 (which was INSANE to begin with) to 29.9% this month without notice. I called and asked that my APR be decreased- I have never had a late fee and make more than my minimum payment each month. I have requested that my APR be lowered to something LEGAL and CHASE refuses- saying it is their bank that is making this change. That is BS! Where can we seek legal action? I have closed the account, effective today. PLEASE HELP

[rue]

I got the same letter but mine added that if I close I have to pay off the entire amount IMMEDIATELY!! WTF! Since I cant do that I'm trying to pay it down as fast as possible and will then close. They did this on my WAMU-Chase card (I guess Chase bought WAMU).
Today I got a notice that they are evaluating my other Chase card (my original Chase card) for possible hikes in interest. How can this be legal!!!!!!!!!!!!!!!!!!
I called them and they said a 'verbal shrug' - if I didnt like it I could leave.
I informed them that I would not only leave but I would never bank with them again or any of their side companies and I'd inform everyone possible to stay clear of them.

[freewillwhere]

I got a letter from Citibank back in Feb 2009 stating they were increasing the interest from 22.9% to 25.99% and the default was going up from the 25.99% to 30.99%.
In addition they were reducing the amount of available credit by 25%.
I was given the opt out option accept the terms or cancel the account.
I choose to cancel the account,then I find that Citibank had the gall to report to the credit agencies that the account was closed by Citibank.this is smelling like a lawsuit to me for sure.
Today I received a letter from Chase for a card that was once WAMU that "Due to changes in market conditions" required that they increase the interest on the card from 17.9% to 21.9% the sole reason for them stated the "Principle factor we considered in amending your account is maintaining profitability on your account".In other words we received money based on the American peoples Gross Domestic Product issued in the form of notes from the Federal Reserve at a small interest set by the Federal Reserve,we then loan you this money adding in our set interest with this prime rate,meanwhile we loan out up to 9 times the initial deposits that we get from the 12 Federal Reserve banks,in return we sell stocks around the world and promise to put them first above all else so that we can have huge salaries and other perks of the trade,and every so often we donate to the politicians that are willing to look the other way whilst we really stick it hard to the consumer.
Yup we Americans are truelly dumbed down,the money in print is done by creating a corporate entity in your name,at birth a childs birth certificate(which may I add is a negotiatable instrument) is sent to the department of Vital statistics where they make that corporate image by re-printing the birth certificate in all capital letters,it is then sent to the U.S Treasury office where they issue bonds in the corporate image of the child,they sell these bonds off around the world to investor's and that amount is then sent to the Federal Reserve as authorised to be printed.
Everyone is making money except for the hard working American.This is the reason why Thomas Jefferson,Adams and Franklin and many other founding Father's had negative veiws of Bankers and Lawyers,remember the Banker doesn't make a move without the Lawyers,and it was the Lawyers that helped create this whole system and it's well embedded within the UCC,that is the only way to release yourself from the public debt.Otherwise the government can seize all assets of every American if they default in their obligations of investor's.Slavery people thanks to Lincoln whom started it all.Now that's true history and that was the main reason for the U.S civil war.

[Linda]

I just learned the interest rate on my closed account has been going up and down for 6 years - I never noticed until this month when I saw the interest rate doubled:
Sears closed my account in 2003 because of a negative mark on my credit report. I had absolutely NO credit line with them anymore, and I was to pay the card off. Suddenly this month I noticed my interest rate doubled, and I have a Total Credit Line amount, and a Cash Access Line amount???

[Erin]

I experienced a horrific couple months as Chase acquired WAMU. My card was at 0% for another two months. I expected an interest increase, but what CHASE did seems unconstitutional. Here is the letter I wrote them.

I have been forced to close my account due to the exorbitant interest rate increase applied to my account as a result of the JPMorgan Chase take over of WAMU cards. The fee increase was the alleged result of a missed payment. I was disputing the claim, and have documented proof (a recorded phone conversation), that the missed payment was not my fault, but an experience had by many customers who had scheduled bills to pay during an unannounced update of the computer system. Despite this admission and a pardoning of the late fee charge, my account never retained its previous interest rate, and after the finalization of the takeover it was increased another 19 percent. Customer service kept instructing me to call back at a later date, and I followed their instructions until finally I was told there was nothing that could be done, and that no interest rates were being decreased. As a customer trying to pay bills and debt, and whose taxes are being used to help failing banks acquire other failing banks as well as pay for obscene bonuses for corporate thieves, I FEEL LIKE I AM BEING STOLEN FROM BY YOUR COMPANY. I have been lied to, and the 12 month CONTRACT THAT I HAD AGREED TO has been broken by your company. The unhelpful and callous attitudes of customer service representatives has been the icing on the 'we're screwing you over cake'. I don't know how our government continues to allow your company and others like you to continue these fraudulent and dishonest dealings. My hope is that it will not be for much longer. I am fortunate that I watch my accounts closely, for many do not. I know that this is what your business thrives on; the hopes that arbitrary increases in charges will go unnoticed. It is indeed a crime, one that has been experienced by many (as I have done some research and consumer advocacy outreach on the matter), and one that WILL NOT GO UNNOTICED any longer. I am no longer a customer, I will never be a customer of yours again, and I will discourage as many people as I can from your company. In addition, I wish I could keep my tax dollars, and those of my loved ones away from your greedy thieving hands.
Yours in Disgust,
EEE

My question is, who can we turn to as we continue to suffer these injustices?

[Dave Peters]

Chase raised my rates on a CLOSED account.Closed it nov 07 because of the rate hike just because crap.I got a "Important notice about your account " letter in jan 09,didn't pay any mind to it seeing how my account was CLOSED.I guess it stated I had to close my closed account or they were jacking it to 13.25 on a CLOSED account.After talking to 2 different people and informing them I was turning it over to the MO States atty Generals office,they changed it back . How many more people got burned by this???

[Van]

These Banks have put the Mafia out of business, and turned into a collection of parasitic, blood sucking, LOAN SHARKS!!!!!!!!!!

[Zagalo]

LOTS more on this particular case is here: www.ChangeInTerms.com (not my site -- just a fan!).

[Zagalo]

LOTS more on this particular case is here: www.ChangeInTerms.com (not my site -- just a fan!).

[Max]

Great information. I'll let you know how I fare in my own personal battle to keep my rates low and fees nonexistent. These companies are ruthless.

[Carole May]

I found this article on Business Week's website called Bank CEOs Grilled On TARP:
http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db20090211_300739.htm?campaign_id=yhoo

The best line ""Representative Maxine Waters (D-Calif.) attacked the bankers for raising credit-card rates despite receiving TARP funds."

Let's hear it for Maxine!!!

[Carole May]

Thanks for the links you had on your blog, Kelly. I just fired off an email to the CEO of credit card services. Thank you, Kevin, for doing an article on this. Chase recently took over WaMu here in the state of WA, and what was once a very good bank, has now become the pits. I am presently looking around for another bank to move all my accounts to as I refuse to put up with Chase's nonsense. They raised everyone's interest rates on credit cards, and are now taking away all the benefits we had as customers of WaMu. I had accounts with Chase when I lived in NYC and hated them, now I despise them.

I wish we could have a million person march on Washington over all of this!

[Meredith]

Tim, what are you saying?... You use too many acronyms... Plain English please: full sentences and whole words so we understand.

[Timothyphx1]

I saw several stories about this in November-

Tageting people with "balance for life" and were taking their sweet time to pay back.

These companies used to EXPECT someone to take the teaser then use the card- thus never getting that tease BT rate.

Most are keeping their low rate-but the 5% min payment and the AF is making many pay them off-
Bad PR but likly good for Chase's bottom line.

Remember- Chase borrowed TARP funds at 5%, do you think thay want to have 2.9 and 3.9 APR loans out to people?
/rant

[Kelly]

We had a similar experience with Chase who said they were raising our rate and we could keep the card and accept the rate change or we could close the account and keep the old terms.

Calling customer service got me nowhere, so I used the Consumerist's site to track down executive emails.

We got a call from someone in the exec office and I'm happy to say they let us keep our current rate on the current balance without closing the account (which would have damaged our credit score right before going to closing on our refi).

I plan to pay it off within the next month. I don't want them earning any $ off me anymore!

I blogged about it here: http://www.thecentsiblelife.com/?p=178

[Cory Jacobs]

When will it all end? Kevin, I think you should go to Washington, D.C. and get those politicians in order. We really need better regulation so that the American people aren't taken advantage of. It's obvious that we cannot rely on congress to do anything about this immediately because they have other things on their priority list, but this affects us right now.